Legislature(1993 - 1994)

03/05/1994 08:00 AM STA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
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             HOUSE STATE AFFAIRS STANDING COMMITTEE                            
                          March 5, 1994                                        
                            8:00 a.m.                                          
                                                                               
                                                                               
  MEMBERS PRESENT                                                              
                                                                               
  Representative Al Vezey, Chairman                                            
  Representative Pete Kott, Vice Chairman                                      
  Representative Gary Davis                                                    
  Representative Harley Olberg                                                 
  Representative Fran Ulmer                                                    
                                                                               
  MEMBERS ABSENT                                                               
                                                                               
  Representative Bettye Davis                                                  
  Representative Jerry Sanders                                                 
                                                                               
  COMMITTEE CALENDAR                                                           
                                                                               
  HB 400:        "An Act relating to administrative                            
                 proceedings involving a determination of                      
                 eligibility for a permanent fund dividend or                  
                 authority to claim a dividend on behalf of                    
                 another."                                                     
                                                                               
                 PASSED OUT OF COMMITTEE                                       
                                                                               
  *HB 373:       "An Act relating to investments of the                        
                 permanent fund involving equity interests in                  
                 and debt obligations secured by mortgages on                  
                 real estate; and providing for an effective                   
                 date."                                                        
                                                                               
                 PASSED OUT OF COMMITTEE                                       
                                                                               
  HB 483:        "An Act relating to payment of permanent fund                 
                 dividends of certain individuals who have                     
                 been absent from the state; and providing for                 
                 an effective date."                                           
                                                                               
                 PASSED OUT OF COMMITTEE                                       
                                                                               
  SB 186:        "An Act relating to state agency                              
                 publications."                                                
                                                                               
                 NOT HEARD                                                     
                                                                               
  HB 328:        "An Act relating to motor vehicle                             
                 registration and registration fees; to fees                   
                 for drivers' licenses and permits; and                        
                 providing for an effective date."                             
                                                                               
                 FAILED TO PASS FROM THE COMMITTEE                             
                                                                               
  *HB 407:       "An Act relating to issuance of commemorative                 
                 gold rush motor vehicle license plates."                      
                                                                               
                 HELD OVER                                                     
                                                                               
                                                                               
  *HB 375:       "An Act relating to investments of the                        
                 permanent fund in certain limited                             
                 partnerships each of whose principal purpose                  
                 is investment in securities of public or                      
                 private companies; and providing for an                       
                 effective date."                                              
                                                                               
                 NOT HEARD                                                     
                                                                               
                                                                               
  WITNESS REGISTER                                                             
                                                                               
  WILLIAM H. SCOTT, Executive Director                                         
  Alaska Permanent Fund Corporation                                            
  P.O. Box 25500                                                               
  Juneau, AK  99802-5500                                                       
  Phone:  465-2047                                                             
  POSITION STATEMENT:  Addressed HB 373                                        
                                                                               
  PETE JEANS, Real Estate Investment Officer                                   
  Alaska Permanent Fund Corporation                                            
  P.O. Box 25500                                                               
  Juneau, AK  99801-5500                                                       
  Phone:  465-2047                                                             
  POSITION STATEMENT:  Answered questions on HB 373                            
                                                                               
  REPRESENTATIVE PETE KOTT                                                     
  Alaska State Legislature                                                     
  Alaska State Capitol, Room 409                                               
  Juneau, AK 99811                                                             
  Phone:  465-3777                                                             
  POSITION STATEMENT:  Prime sponsor of HB 483 and addressed                   
                       HB 328                                                  
                                                                               
  JACK PHELPS, Staff                                                           
  Representative Pete Kott                                                     
  Alaska State Capitol, Room 409                                               
  Juneau, AK  99811                                                            
  Phone:  465-3777                                                             
  POSITION STATEMENT:  Outlined CSHB 483                                       
                                                                               
  TOM WILLIAMS, Director                                                       
  Permanent Fund Dividend Division                                             
  Department of Revenue                                                        
  P.O. Box 110460                                                              
  Juneau, AK  99811-0460                                                       
  Phone:  465-2323                                                             
  POSITION STATEMENT:  Answered questions on HB 483                            
                                                                               
  JANE BUTLER, Staff                                                           
  Representative Pete Kott                                                     
  Alaska State Capitol, Room 409                                               
  Juneau, AK  99811                                                            
  Phone:  465-3777                                                             
  POSITION STATEMENT:  Outlined HB 328                                         
                                                                               
  JEANIE LARSON, Staff                                                         
  Representative Terry Martin                                                  
  Alaska State Capitol, Room 411                                               
  Juneau, AK  99811                                                            
  Phone:  465-3783                                                             
  POSITION STATEMENT:  Answered questions on HB 328                            
                                                                               
  JUANITA HENSLEY, Chief of Driver Services                                    
  Division of Motor Vehicles                                                   
  Department of Public Safety                                                  
  P.O. Box 20020                                                               
  Juneau, AK  99802                                                            
  Phone:  465-2650                                                             
  POSITION STATEMENT:  Answered questions on HB 328 and                        
                       HB 407                                                  
  RON KING                                                                     
  Department of Environmental Conservation                                     
  410 Willoughby Ave. #105                                                     
  Juneau, AK  99801                                                            
  Phone:  465-5100                                                             
  POSITION STATEMENT:  Addressed HB 407                                        
                                                                               
  PREVIOUS ACTION                                                              
                                                                               
  BILL:  HB 400                                                                
  SHORT TITLE: PFD ADMINISTRATIVE PROCEEDINGS                                  
  SPONSOR(S): REPRESENTATIVE(S) GREEN                                          
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  01/26/94      2154    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/26/94      2154    (H)   STATE AFFAIRS, FINANCE                           
  03/03/94              (H)   STA AT 08:00 AM CAPITOL 102                      
  03/03/94              (H)   MINUTE(STA)                                      
                                                                               
  BILL:  HB 373                                                                
  SHORT TITLE: PERMANENT FUND INVESTMENTS IN REAL ESTATE                       
  SPONSOR(S): RULES BY REQUEST OF LEGISLATIVE BUDGET AND AUDIT                 
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  01/14/94      2065    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/14/94      2066    (H)   STATE AFFAIRS, FINANCE                           
  03/05/94              (H)   STA AT 08:00 AM CAPITOL 102                      
                                                                               
  BILL:  HB 483                                                                
  SHORT TITLE: PER. FUND DIVIDENDS OF ABSENT INDIVIDUALS                       
  SPONSOR(S): REPRESENTATIVE(S) KOTT                                           
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  02/14/94      2378    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  02/14/94      2378    (H)   STATE AFFAIRS, FINANCE                           
  02/22/94              (H)   STA AT 08:00 AM CAPITOL 102                      
  03/05/94              (H)   STA AT 08:00 AM CAPITOL 102                      
                                                                               
  BILL:  HB 328                                                                
  SHORT TITLE: BIENNIAL VEHICLE REGISTRATION                                   
  SPONSOR(S): REPRESENTATIVE(S) MARTIN,BARNES,Phillips,B.Davis                 
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  01/03/94      2013    (H)   PREFILE RELEASED                                 
  01/10/94      2013    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/10/94      2013    (H)   STATE AFFAIRS, FINANCE                           
  01/13/94      2054    (H)   COSPONSOR(S):  B. DAVIS                          
  01/22/94              (H)   STA AT 08:00 AM CAPITOL 102                      
  01/22/94              (H)   MINUTE(STA)                                      
  01/29/94              (H)   MINUTE(STA)                                      
  02/08/94              (H)   STA AT 08:00 AM CAPITOL 102                      
  02/08/94              (H)   MINUTE(STA)                                      
  03/01/94              (H)   STA AT 08:00 AM CAPITOL 102                      
  03/01/94              (H)   MINUTE(STA)                                      
                                                                               
  BILL:  HB 407                                                                
  SHORT TITLE: COMMEMORATIVE GOLD RUSH LICENSE PLATES                          
  SPONSOR(S): REPRESENTATIVE(S) FOSTER,Toohey                                  
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  01/27/94      2166    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/27/94      2166    (H)   STATE AFFAIRS, FINANCE                           
  01/31/94      2207    (H)   COSPONSOR(S):  TOOHEY                            
  03/01/94              (H)   STA AT 08:00 AM CAPITOL 102                      
  03/01/94              (H)   MINUTE(STA)                                      
                                                                               
  BILL:  HB 375                                                                
  SHORT TITLE: PERMANENT FUND INVESTMENTS - LTD PARTNERS                       
  SPONSOR(S): RULES BY REQUEST OF LEGISLATIVE BUDGET AND AUDIT                 
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  01/14/94      2066    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  01/14/94      2066    (H)   STATE AFFAIRS, FINANCE                           
  03/05/94              (H)   STA AT 08:00 AM CAPITOL 102                      
                                                                               
  BILL:  SB 186                                                                
  SHORT TITLE: STATE AGENCY PUBLICATIONS                                       
  SPONSOR(S): SENATOR(S) FRANK                                                 
                                                                               
  JRN-DATE     JRN-PG               ACTION                                     
  04/07/93      1221    (S)   READ THE FIRST TIME/REFERRAL(S)                  
  04/07/93      1221    (S)   STATE AFFAIRS                                    
  04/14/93      1354    (S)   STA RPT  3DP                                     
  04/14/93      1354    (S)   ZERO FISCAL NOTE (ADM)                           
  04/14/93              (S)   STA AT 9:00 AM BUTRVICH RM 205                   
  04/14/93              (S)   MINUTE(STA)                                      
  04/14/93              (S)   MINUTE(RLS)                                      
  04/26/93      1761    (S)   RULES 4 CALENDAR   4/26/93                       
  04/26/93      1762    (S)   READ THE SECOND TIME                             
  04/26/93      1762    (S)   AM NO  1  ADOPTED UNAN CONSENT                   
  04/26/93      1763    (S)   AM NO  2  ADOPTED UNAN CONSENT                   
  04/26/93      1764    (S)   AM NO  3  FAILED  Y10 N10                        
  04/26/93      1764    (S)   ADVANCE TO THIRD READING FAILED                  
                              Y11 N9                                           
  04/26/93      1764    (S)   THIRD READING 4/27 CALENDAR                      
  04/27/93      1842    (S)   READ THE THIRD TIME SB 186 AM                    
  04/27/93      1842    (S)   PASSED Y20 N-                                    
  04/27/93      1842    (S)   DONLEY NOTICE OF                                 
                              RECONSIDERATION                                  
  04/28/93      1891    (S)   RECONSIDERATION NOT TAKEN UP                     
  04/28/93      1893    (S)   TRANSMITTED TO (H)                               
  05/06/93      1661    (H)   READ THE FIRST TIME/REFERRAL(S)                  
  05/06/93      1661    (H)   L&C,STATE AFFAIRS,JUDICIARY,                     
                              FINANCE                                          
  02/17/94              (H)   L&C AT 03:00 PM CAPITOL 17                       
  02/17/94              (H)   MINUTE(L&C)                                      
  02/18/94      2455    (H)   L&C RPT  5DP                                     
  02/18/94      2455    (H)   DP: PORTER,SITTON,MULDER,                        
                              GREEN,HUDSON                                     
  02/18/94      2455    (H)   -ZERO FISCAL NOTE (ADM) 2/18/94                  
  03/05/94              (H)   STA AT 08:00 AM CAPITOL 102                      
                                                                               
  ACTION NARRATIVE                                                             
                                                                               
  TAPE 94-22, SIDE A                                                           
  Number 000                                                                   
                                                                               
  CHAIRMAN AL VEZEY called the meeting to order at 8:00 a.m.                   
  Members present were REPRESENTATIVES ULMER, G. DAVIS, KOTT                   
  and OLBERG.  A quorum was present.                                           
  HB 400 - PFD ADMINISTRATIVE PROCEEDINGS                                      
                                                                               
  CHAIRMAN VEZEY announced the committee had passed HB 400 out                 
  of committee on Thursday, March 3, 1994; however, the                        
  Clerk's Office informed him the fiscal note was not in                       
  proper order.  Therefore, HB 400 has been brought back into                  
  committee to adopt a proper fiscal note.                                     
                                                                               
  CHAIRMAN VEZEY took an at ease at 8:02 a.m. for the                          
  committee to examine the new fiscal note.  The meeting                       
  reconvened at 8:05 a.m.                                                      
                                                                               
  CHAIRMAN VEZEY moved the committee's previous action, which                  
  passed HB 400 from the House State Affairs Committee, be                     
  rescinded.  The committee secretary called the roll, and the                 
  passage of HB 400 by the House State Affairs Committee was                   
  rescinded.                                                                   
                                                                               
  Number 071                                                                   
                                                                               
  REPRESENTATIVE HARLEY OLBERG moved the new fiscal note for                   
  HB 400 be adopted.                                                           
                                                                               
  Number 072                                                                   
                                                                               
  CHAIRMAN VEZEY recognized the motion and asked the committee                 
  secretary to call the roll.  The new fiscal note for HB 400                  
  was adopted.                                                                 
                                                                               
  Number 085                                                                   
                                                                               
  REPRESENTATIVE GARY DAVIS moved that HB 400 be passed out of                 
  committee with individual recommendations.                                   
                                                                               
  Number 095                                                                   
                                                                               
  CHAIRMAN VEZEY recognized the motion and asked the committee                 
  secretary to call the roll.  HB 400 passed from the House                    
  State Affairs Committee with individual recommendations.                     
  HB 373 - PERMANENT FUND INVESTMENTS IN REAL ESTATE                           
                                                                               
  CHAIRMAN VEZEY opened HB 373 for discussion.                                 
                                                                               
  Number 127                                                                   
                                                                               
  WILLIAM H. SCOTT, EXECUTIVE DIRECTOR, ALASKA PERMANENT FUND                  
  CORPORATION (APFC), asked if PETE JEANS could join the table                 
  with him.                                                                    
                                                                               
  CHAIRMAN VEZEY allowed his request.                                          
                                                                               
  MR. SCOTT introduced himself.                                                
                                                                               
  PETE JEANS, REAL ESTATE INVESTMENT OFFICER, ALASKA PERMANENT                 
  FUND CORPORATION introduced himself.                                         
                                                                               
  Number 142                                                                   
                                                                               
  MR. SCOTT said, the APFC was not requesting the legislature                  
  do something that changes the investments the APFC already                   
  has, but actually to provide for better management of the                    
  real estate portion of APFC's assets and to improve the                      
  investment ability of these assets.                                          
                                                                               
  MR. JEANS gave a background of the APFC and its acquisition                  
  of assets.  APFC began investing 10 years ago, and the                       
  legislation that was passed allowed APFC to do 40 percent of                 
  any one real estate deal.  The legislature then felt the                     
  APFC was inexperienced in dealing with real estate, and only                 
  40 percent would force the APFC to "piggyback" on the major                  
  pension funds and institutional investors around the                         
  country.  APFC started off in real estate doing comingled                    
  funds, the same as most of the pension funds around the                      
  country.  They had very little control, and a lot of the                     
  properties they bought were in blind pools, so they didn't                   
  even know what they were buying.                                             
                                                                               
  MR. JEANS said, after about a year or a year and one-half,                   
  APFC began separated account investments, co-investing with                  
  other major pension funds around the country.  This worked                   
  well for APFC.  There weren't that many pension funds                        
  investing in real estate, and APFC was able to negotiate                     
  some controls in the deals; although, they were always in                    
  the minority possession.  The APFC would always ensure they                  
  had a "shoot out clause" or a "buy/sell arrangement,"  so                    
  they could get out of a particular investment.                               
                                                                               
  MR. JEANS commented money is now returning to the real                       
  estate markets, after their decline in the 1980s, as are                     
  pension funds; therefore, the APFC is competing with a lot                   
  of money to try to get decent real estate investments.  The                  
  current statutes do not provide the APFC with the ability to                 
  negotiate for the controls they were able to get around five                 
  years ago.  APFC has had to turn down deals because they                     
  could not get any kind of controls.                                          
                                                                               
  MR. JEANS said, APFC has become a major investor in real                     
  estate markets, with smaller pension funds willing to co-                    
  invest with APFC; however, not having control of the real                    
  estate is very limiting.                                                     
                                                                               
  MR. JEANS stated the APFC Board did unanimously support                      
  Resolution 93-11.  If HB 373 were to pass, the APFC would                    
  still co-invest on major deals, however, they would                          
  negotiate to have controls.  With smaller properties they                    
  would choose to retain 100 percent control.                                  
                                                                               
  MR. JEANS commented that APFC has become one of the top 10                   
  major real estate holders of all the pension funds in the                    
  country.                                                                     
                                                                               
  Number 254                                                                   
                                                                               
  REPRESENTATIVE OLBERG asked what took the APFC so long to                    
  introduce these changes.                                                     
                                                                               
  MR. JEANS replied, the APFC had been able to get their                       
  desired controls until the last couple of years.  APFC is                    
  now losing out to co-investors, who are choosing to take                     
  over the whole deal.  Other investors no longer need the                     
  funds of the APFC because of the recent influx of money in                   
  the markets.                                                                 
                                                                               
  CHAIRMAN VEZEY asked if REPRESENTATIVE OLBERG was in favor                   
  of the concept of HB 373.                                                    
                                                                               
  REPRESENTATIVE OLBERG responded he was very much in favor of                 
  HB 373.                                                                      
                                                                               
  CHAIRMAN VEZEY went through the contents of the packet.  He                  
  questioned the Morrison & Foerster letter which frequently                   
  mentions the 1974 ERISA statute.  He asked MR. JEANS to                      
  explain the letter.                                                          
                                                                               
  Number 314                                                                   
                                                                               
  MR. JEANS responded, the Morrison & Foerster outlined the                    
  legal points of the control issues, specifically the                         
  controls the APFC would no longer be able to acquire in a                    
  minority position.  He noted the problems in negotiations                    
  are leading to enormous legal costs.                                         
                                                                               
  Number 324                                                                   
                                                                               
  CHAIRMAN VEZEY quoted the Morrison & Foerster letter (on                     
  file), "We believe that this proposed amendment would be                     
  beneficial in carrying out the investment policies of the                    
  APFC for several reasons."  He assumed the proposed                          
  amendment refers to the suggested statutory changes.                         
                                                                               
  Number 330                                                                   
                                                                               
  MR. JEANS confirmed CHAIRMAN VEZEY.  He stated the APFC had                  
  been accepted in the real estate industry as the leader in                   
  co-investment.  The APFC is written up almost monthly in                     
  different national magazines about co-investing.  He                         
  referred to "The Institute in Real Estate" letter (on file),                 
  which covers the disadvantages of co-investment, and he                      
  stated it relates to some of the difficulties the APFC has                   
  come across.                                                                 
                                                                               
  Number 348                                                                   
                                                                               
  REPRESENTATIVE FRAN ULMER pointed out the phrase she found                   
  in Resolution 93-11 adopted by the APFC Board which states,                  
  "The Alaska Permanent Fund Corporation has lost                              
  opportunities to acquire high return, low risk real estate."                 
  She stated the issue is, the risk is being changed by                        
  changing the percentage of ownership by the APFC.  She                       
  assumed the previous legislature's debate over APFC controls                 
  was probably more over what level of risk was acceptable,                    
  and at what point would the permanent fund be put in a                       
  unacceptable higher risk category.  REPRESENTATIVE ULMER                     
  asked, if HB 373 were to pass, what sort of risk limiting                    
  strategies does the APFC plan to employ.                                     
                                                                               
  MR. JEANS responded, once a year, when the APFC has their                    
  asset allocation for the permanent fund, the APFC Board                      
  passes a resolution that governs the real estate                             
  investments.  The resolution is rather specific regarding                    
  what APFC can do as far as property type and amounts to                      
  about 20 pages.                                                              
                                                                               
  Number 391                                                                   
                                                                               
  MR. SCOTT continued, the APFC is also restricted, whereby                    
  they cannot buy a property which is not at least                             
  substantially leased, meaning 75-80 percent occupied.  With                  
  HB 373, the APFC will continue to co-invest; however, with                   
  the ability to have more than 40 percent, they can easily                    
  put together 50/50, or 2/3 and 1/3 deals.  APFC would like                   
  equal or complete control.                                                   
                                                                               
  REPRESENTATIVE OLBERG did not think the degree of risk would                 
  change, as compared to the degree of exposure.  Risk is                      
  inherent in an investment.                                                   
                                                                               
  Number 413                                                                   
                                                                               
  MR. JEANS believed some of the risk would be eliminated with                 
  the gain in control of the property deals.  He gave an                       
  example of property found by the APFC, introduced to                         
  Colorado for co-investment with the APFC's commitment to                     
  fund the property when it was leased, and Colorado took over                 
  the whole deal when the APFC kept vying unsuccessfully for                   
  controls.  In 1993, the APFC had almost four deals fall out                  
  in this manner.                                                              
                                                                               
  Number 433                                                                   
                                                                               
  MR. SCOTT pointed out APFC exposure is limited by their                      
  asset allocation percentage.                                                 
                                                                               
  Number 438                                                                   
                                                                               
  CHAIRMAN VEZEY thought the legislature would be concerned                    
  that fiducial standards would not be decreased.  Without                     
  controls, the APFC would establish less fiducial                             
  responsibility, than with controls.                                          
                                                                               
  MR. JEANS replied CHAIRMAN VEZEY was correct.                                
                                                                               
  Number 449                                                                   
                                                                               
  CHAIRMAN VEZEY clarified the APFC Board has policies intact                  
  which preclude it from investing in development properties.                  
                                                                               
  MR. JEANS confirmed CHAIRMAN VEZEY.                                          
                                                                               
  Number 454                                                                   
                                                                               
  CHAIRMAN VEZEY continued the APFC would also be precluded                    
  from investing in speculative properties without reasonable                  
  assurance of positive cash flow.                                             
                                                                               
  MR. JEANS responded that provision would remain in statute.                  
                                                                               
  Number 460                                                                   
                                                                               
  CHAIRMAN VEZEY asked what degree of public scrutiny would                    
  any policy change by the Board receive.                                      
                                                                               
  MR. JEANS said proposed changes are advertised for Board                     
  meetings and the resolution passed every year is done at a                   
  public meetings.                                                             
                                                                               
  Number 467                                                                   
                                                                               
  CHAIRMAN VEZEY stated the actions of the APFC Board are                      
  reviewed by both the Governor's Office and the legislature.                  
  The APFC is subject to frequent audits by the Legislative                    
  Budget and Audit Committee.                                                  
                                                                               
  Number 473                                                                   
                                                                               
  REPRESENTATIVE PETE KOTT pointed out to the committee there                  
  is a companion bill to HB 373 in the Senate with four                        
  committee referrals.  This companion bill already had a                      
  committee substitute offered in the Senate State Affairs                     
  Committee.  HB 373 only has two committee referrals.                         
                                                                               
  Number 478                                                                   
                                                                               
  REPRESENTATIVE OLBERG moved HB 373 be passed from committee                  
  with individual recommendations.                                             
                                                                               
  Number 480                                                                   
                                                                               
  CHAIRMAN VEZEY recognized the motion, the committee                          
  secretary called the roll, and HB 373 passed from the House                  
  State Affairs Committee with individual recommendations.                     
  HB 483 - PERMANENT FUND DIVIDEND FOR ABSENT INDIVIDUALS                      
                                                                               
  CHAIRMAN VEZEY opened HB 483 for discussion.                                 
                                                                               
  Number 497                                                                   
                                                                               
  REPRESENTATIVE PETE KOTT, prime sponsor of HB 483, addressed                 
  his bill.  He felt HB 483 conforms to the original intent of                 
  the permanent fund dividend (PFD) program.  He stated HB 483                 
  would provide a dividend check for those who intend to                       
  remain in Alaska.  This was challenged in the U.S. District                  
  Court in 1986, and confirmed.  The intent of HB 483 is to                    
  place into trust accounts within the dividend, or general                    
  fund, dividends for those individuals who remain out of                      
  state for more than 181 consecutive days in a permanent fund                 
  calendar year.  Individuals would not receive their check                    
  for that year, instead they would continue to apply and the                  
  money would be appropriated into an account by the Permanent                 
  Fund Division.  This money would be provided to the                          
  individuals, once they return to the state and have met the                  
  existing requirements.  REPRESENTATIVE KOTT felt HB 483                      
  would help prevent potential fraud.  He brought version E of                 
  the committee substitute, before the committee.                              
                                                                               
  Number 528                                                                   
                                                                               
  REPRESENTATIVE OLBERG moved to adopt version E of the                        
  committee substitute for HB 483.                                             
                                                                               
  Number 529                                                                   
                                                                               
  CHAIRMAN VEZEY recognized the motion and asked the committee                 
  secretary to call roll.  The version E of the committee                      
  substitute for HB 483 was adopted.                                           
                                                                               
  Number 533                                                                   
                                                                               
  REPRESENTATIVE KOTT announced there had been changes from                    
  the original bill which are essentially conforming changes                   
  to the existing policy.                                                      
                                                                               
  Number 535                                                                   
                                                                               
  JACK PHELPS, REPRESENTATIVE PETE KOTT'S STAFF, outlined the                  
  changes made by the CS for HB 483.  The changes made were                    
  primarily technical, recommended by the Department of                        
  Revenue, to make the PFD program easier to operate.  They                    
  had suggested the language in CSHB 483, relating to the                      
  amount of days absent, conform to existing regulations.  He                  
  referenced paragraph 1, lines 10-11, the allowable absence                   
  was increased in the returning year from 30 days to 90 days.                 
  Currently, the state allows for an unexplained absence up to                 
  90 days, and if a stricter standard in the requalifying year                 
  was applied, an equal protection problem could arise.  A                     
  stricter standard would also have required additional                        
  oversight by the Department of Revenue to review those                       
  individuals with a 30 day absence limit separately from                      
  individuals with a 90 day absence limit.                                     
                                                                               
  MR. PHELPS noted the change in paragraph 2 is strictly                       
  technical, not changing the intent the HB 483.                               
                                                                               
  MR. PHELPS stated subsection (D), lines 8-9 of HB 483 became                 
  unnecessary once the other changes had been made; therefore                  
  it was deleted.                                                              
                                                                               
  Number 566                                                                   
                                                                               
  CHAIRMAN VEZEY pointed out paragraph C, section 1, dealing                   
  with the subject of probate, and asked if REPRESENTATIVE                     
  ULMER concurred with the wording.  He felt it was the wrong                  
  approach to pay part of an estate to an appropriate person,                  
  rather than paying the money the estate.                                     
                                                                               
  Number 574                                                                   
                                                                               
  MR. PHELPS responded subsection C is included in CSHB 483 to                 
  cause the bill to be consistent with its purpose.  One of                    
  the stated purposes of the dividend program, affirmed by                     
  court decision, is to encourage people to maintain their                     
  residence in Alaska.  CSHB 483 provides a mechanism for                      
  people to demonstrate their intention to maintain their                      
  residency in Alaska.  Subsection C is included to account                    
  for those individuals who die before they can demonstrate                    
  their intent.                                                                
                                                                               
  Number 593                                                                   
                                                                               
  CHAIRMAN VEZEY asked how the PFD Division could determine                    
  who the appropriate person would be to distribute money.                     
                                                                               
  REPRESENTATIVE ULMER replied she would have drafted CSHB 483                 
  "to the estate of the individual", as opposed to "the                        
  person."                                                                     
                                                                               
  REPRESENTATIVE G. DAVIS felt, after listening to MR. PHELPS'                 
  statement, that it would be up to someone else to show the                   
  intent of the deceased person.  He did not believe this                      
  would be possible.                                                           
                                                                               
  Number 605                                                                   
                                                                               
  CHAIRMAN VEZEY interpreted the statute as to someone who has                 
  applied, expressing their intent, however, died in the                       
  process.  He thought the PFD would automatically be paid.                    
  CHAIRMAN VEZEY wanted to know how the funds would be issued.                 
  A tremendous responsibility may be lifted from the PFD                       
  Division if the funds were paid to the estate, plus the                      
  funds would capitalize the estate when capital for the                       
  estate may be needed.  CHAIRMAN VEZEY mentioned estate                       
  litigation can continue for several years.                                   
                                                                               
  MR. PHELPS clarified CHAIRMAN VEZEY's point was that the                     
  funds could be paid to the estate, and not a particular                      
  person.                                                                      
                                                                               
  Number  620                                                                  
                                                                               
  CHAIRMAN VEZEY stated the legal definition of "person" would                 
  include an estate.                                                           
                                                                               
  REPRESENTATIVE OLBERG questioned how many dividends an                       
  individual could receive after being out of the state for a                  
  period of time.  If, for example, an individual has been out                 
  of the state for 20 years, and had the dividend denied                       
  because of not visiting enough, would CSHB 483 apply.                        
                                                                               
  Number 628                                                                   
                                                                               
  REPRESENTATIVE KOTT replied if they were originally going to                 
  get the dividend check, they would continue to be allowed to                 
  receive the dividend check with CSHB 483.  CSHB 483 would                    
  place their money into an account.                                           
                                                                               
  Number 631                                                                   
                                                                               
  REPRESENTATIVE OLBERG clarified the individual had been                      
  disallowed in his example.                                                   
                                                                               
  Number 632                                                                   
                                                                               
  REPRESENTATIVE KOTT responded if the individual had been                     
  disallowed he/she would have been disallowed under CSHB 483.                 
                                                                               
  Number 633                                                                   
                                                                               
  REPRESENTATIVE OLBERG asked the benefit of CSHB 483.                         
                                                                               
  REPRESENTATIVE KOTT answered, under current practice,                        
  individuals with uncertain intent are receiving dividends.                   
  CSHB 483 closes this loophole.  An individual has to return                  
  for over a year.                                                             
                                                                               
  Number 645                                                                   
                                                                               
  MR. PHELPS pointed out subsection (B) clearly states any                     
  time during that period, if a person fails to apply or fails                 
  to qualify, they have disallowed themselves for the                          
  dividends.  A person cannot leave for three years, not                       
  qualify for one year, and expect to return and collect those                 
  three previous years.                                                        
                                                                               
  Number 654                                                                   
                                                                               
  REPRESENTATIVE OLBERG asked how Congressman Don Young would                  
  respond to CSHB 483.                                                         
                                                                               
  REPRESENTATIVE ULMER thought Congressman Don Young would                     
  receive a dividend check, anyway.                                            
                                                                               
  CHAIRMAN VEZEY introduced TOM WILLIAMS as the next to                        
  testify.                                                                     
                                                                               
  Number 662                                                                   
                                                                               
  TOM WILLIAMS, DIRECTOR, PERMANENT FUND DIVIDEND DIVISION,                    
  DEPARTMENT OF REVENUE, answered questions on CSHB 483.  The                  
  PFD Division did supply zero fiscal notes for both the                       
  original HB 483 and CSHB 483.  He felt it would be simple to                 
  administer the program under CSHB 483.  The PFD Division                     
  does currently issue dividends to the estate of a deceased                   
  individual, if the individual had qualified and applied for                  
  the dividend before they died.  He did not see a problem                     
  with the current language in CSHB 483 regarding this.  MR.                   
  WILLIAMS stated the changes in CSHB 483 minimize the impact                  
  on the PFD Division, whereby additional forms would not have                 
  to be created.  All those who were eligible would be                         
  included in the calculation of the dividend so there would                   
  not be an effect on the amount of the dividend.  He pointed                  
  out the only difference would be, when it came time for                      
  payment, those specific individuals would be put in a                        
  special pending status, and the PFD Division would not issue                 
  their checks until they met the requirements of returning to                 
  Alaska and staying for all 90 days.  Individuals would be                    
  sent a notice when the dividend would normally come up for                   
  payment.                                                                     
                                                                               
  TAPE 94-22, SIDE B                                                           
  Number 000                                                                   
                                                                               
  MR. WILLIAMS continued, the first year in which the                          
  individual, with dividends on account, indicated on the                      
  application they had not been absent for more than 90 days                   
  would trigger the release of all prior year dividends.  The                  
  PFD Division did not see any problems in administering the                   
  program.                                                                     
                                                                               
  Number 020                                                                   
                                                                               
  REPRESENTATIVE ULMER clarified CSHB 483 would include all                    
  those individuals out of state on an allowable absence.                      
                                                                               
  MR. WILLIAMS confirmed REPRESENTATIVE ULMER.                                 
                                                                               
  Number 028                                                                   
                                                                               
  REPRESENTATIVE ULMER asked if the money not paid out of the                  
  PFD every year the individual is absent would be kept in                     
  separate accounts, for example, a separate account for FY                    
  95, FY 96, FY 97 or will it be kept in the one big dividend                  
  pool.                                                                        
                                                                               
  MR. WILLIAMS answered there is one dividend fund.  Every                     
  year, the money left over, the PFD Division transfers in                     
  earnings from the APFC, deducting administrative costs and                   
  prior year dividends.  The remaining money is used to                        
  calculate the current year dividends.  He said there was no                  
  need for a separate account and prior year obligations would                 
  be reserved in the fund itself.                                              
                                                                               
  Number 059                                                                   
                                                                               
  REPRESENTATIVE ULMER inquired if CSHB 483 would have any                     
  impact on the calculation of the dividend level in the                       
  future.  She felt if an individual collects their dividends                  
  after ten years, and the money has been kept in the fund for                 
  all of those years, it may offset the new calculations.                      
                                                                               
  MR. WILLIAMS responded the only effect would be if someone                   
  who previously claimed a dividend, and had been included in                  
  the calculation with a portion of funds set aside to pay                     
  their dividend, at some later point did not qualify for a                    
  dividend.  Those funds would then be released and are                        
  included in a subsequent year's calculation.  There would be                 
  a small incremental increase.  There would not be a                          
  detrimental effect on the dividend.                                          
                                                                               
  Number 107                                                                   
                                                                               
  REPRESENTATIVE ULMER clarified the excess money would be put                 
  aside so the PFD would always be able to be paid.                            
                                                                               
  Number 109                                                                   
                                                                               
  MR. WILLIAMS noted there is no provision in the dividend                     
  fund for setting something aside and paying interest on it.                  
  Therefore, the money would not accrue interest, because the                  
  funds are not set aside separately.                                          
                                                                               
  Number 119                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS stated he understood CSHB 483 would                  
  include college students, also.  Students would not receive                  
  their dividends until they returned for a year from college.                 
                                                                               
  Number 125                                                                   
                                                                               
  MR. WILLIAMS corrected CSHB 483 states "181 consecutive                      
  days" and any college student returning in the summer would                  
  not have their dividend withheld.  The qualifying year would                 
  be a calendar year.  Most students would not be absent for a                 
  straight 181 day consecutive period.                                         
                                                                               
  Number 147                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS stated most students attend school                   
  from September-June and he thought they would be required to                 
  come home for Christmas.                                                     
                                                                               
  CHAIRMAN VEZEY clarified the calendar year begins January 1                  
  and ends December 31.                                                        
                                                                               
  Number 165                                                                   
                                                                               
  REPRESENTATIVE OLBERG asked if the committee wanted to amend                 
  paragraph C, line 7, deleting the words,"the appropriate                     
  person on behalf of," and just pay the dividend to the                       
  estate of the individual.                                                    
                                                                               
  CHAIRMAN VEZEY responded MR. WILLIAMS indicated the wording                  
  was not a problem.  He asked REPRESENTATIVE ULMER if the                     
  wording troubled her.                                                        
                                                                               
  Number 176                                                                   
                                                                               
  REPRESENTATIVE ULMER felt the wording was fine, as long as                   
  MR. WILLIAMS was comfortable with it.  She note saying "to                   
  the estate" would be cleaner.                                                
                                                                               
  REPRESENTATIVE G. DAVIS moved to pass CSHB 483 from                          
  committee with attached fiscal notes.                                        
                                                                               
  Number 200                                                                   
                                                                               
  CHAIRMAN VEZEY recognized the motion and asked the committee                 
  secretary to call the roll.  CSHB 483 passed from HOuse                      
  State Affairs Committee.                                                     
                                                                               
  CHAIRMAN VEZEY called a recess at 8:59 a.m.  The meeting                     
  resumed at 9:10 a.m.                                                         
  SB 186 - STATE AGENCY PUBLICATIONS                                           
                                                                               
  CHAIRMAN VEZEY said SB 186 by Senator Steve Frank was before                 
  the committee.  CHAIRMAN VEZEY asked if anyone from Senator                  
  Frank's office was there to give a sponsor statement.                        
  Seeing no one from Senator Frank's office, the committee                     
  moved on to HB 328.                                                          
  HB 328 - BIENNIAL VEHICLE REGISTRATION                                       
                                                                               
  CHAIRMAN VEZEY opened HB 328 for discussion.                                 
                                                                               
  Number 228                                                                   
                                                                               
  REPRESENTATIVE KOTT, HB 328 subcommittee chair, moved that                   
  version R of committee substitute for HB 328 be adopted.                     
                                                                               
  Number 236                                                                   
                                                                               
  CHAIRMAN VEZEY recognized the motion and hearing no                          
  objection, version R of CS for HB 328, was adopted by the                    
  committee for discussion.                                                    
                                                                               
  Number 237                                                                   
                                                                               
  REPRESENTATIVE KOTT noted there were two major changes made                  
  to HB 328 which deal with policy.  First, who'll be                          
  collecting the emission taxes.  Secondly, the fee structure.                 
                                                                               
  Number 250                                                                   
                                                                               
  JANE BUTLER, REPRESENTATIVE PETE KOTT'S STAFF, outlined the                  
  changes made by CSHB 328.  She indicated on page 8, line 26,                 
  "except for as provided under (d) of this section," and then                 
  "(d)".  This does not require the municipality to collect                    
  the tax.  If the municipality and a commissioner of Public                   
  Safety agree, upon their agreement, that is how they decide                  
  who collects the tax.  She stated this would be the major                    
  change in CSHB 328.                                                          
                                                                               
  Number 265                                                                   
                                                                               
  CHAIRMAN VEZEY thought subsection (c) and (d) read                           
  differently; however, he understood MR. BUTLER'S intent.                     
                                                                               
  MS. BUTLER replied the change is basically that who collects                 
  the tax will be decided between the two parties.                             
                                                                               
  Number 277                                                                   
                                                                               
  REPRESENTATIVE KOTT confirmed CHAIRMAN VEZEY's                               
  interpretation.                                                              
                                                                               
  Number 280                                                                   
                                                                               
  REPRESENTATIVE ULMER asked how the eight percent tax rate                    
  was chosen.                                                                  
                                                                               
  REPRESENTATIVE KOTT responded eight percent is currently in                  
  statute.                                                                     
                                                                               
  REPRESENTATIVE ULMER inquired if the eight percent reflected                 
  what the program actually costs.                                             
                                                                               
  CHAIRMAN VEZEY believed MS. HENSLEY had previously testified                 
  the Department of Public Safety was satisfied with the eight                 
  percent.                                                                     
                                                                               
  Number 286                                                                   
                                                                               
  REPRESENTATIVE ULMER thought the percentage ought to be                      
  revenue neutral.  The program should not cost the state.                     
                                                                               
  REPRESENTATIVE KOTT responded the state is currently                         
  collecting the tax and it has had a positive effect.                         
                                                                               
  Number 298                                                                   
                                                                               
  MS. BUTLER stated CSHB 328 needs to be changed on page 6,                    
  line 22, and on page 10, line 24, to read "biennial",                        
  instead of "annual."  She also mentioned the fee structure                   
  on page 7, section 16, had been questioned as to whether or                  
  not CSHB 328 needed to dictate it.  If the municipalities                    
  were allowed to collect their own taxes, she noted, then a                   
  fee structure would not have to be present in CSHB 328.  DMV                 
  and the sponsor would rather have this issue taken up in the                 
  Finance Committee.                                                           
                                                                               
  Number 332                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS asked what REPRESENTATIVE TERRY                      
  MARTIN's rationale is in reducing the fee lower than $35.                    
                                                                               
  JEANIE LARSON, REPRESENTATIVE TERRY MARTIN'S STAFF,                          
  responded that REPRESENTATIVE  MARTIN, CSHB 328 SPONSOR,                     
  wanted to encourage people to adopt the biennial                             
  registration by lowering fees.  He also felt making the fees                 
  less would make people more likely to register their cars.                   
  She noted there is an approximate 10 percent reduction in                    
  cost to the DMV.  There will also be less need to hire new                   
  staff.                                                                       
                                                                               
  Number 354                                                                   
                                                                               
  REPRESENTATIVE ULMER thought the intent of biennial                          
  registration was to save the state money and time.  She                      
  noted CSHB 328 may save the state some staff time; however,                  
  at the price of $4.5 million, CSHB 328 did not sound like a                  
  good deal.  She asked what the purpose of CSHB 328 would be.                 
                                                                               
  MS. LARSON responded REPRESENTATIVE MARTIN felt savings                      
  should be passed on to the consumer, and CSHB 328 would be a                 
  trade off with the decrease in staff time and new hires.                     
                                                                               
  Number 369                                                                   
                                                                               
  REPRESENTATIVE OLBERG asked why there was a difference in                    
  fees for pick-ups and mobile homes.                                          
                                                                               
  MS. LARSON stated those fees were in current statute.                        
                                                                               
  JUANITA HENSLEY, CHIEF OF DRIVER SERVICES, DIVISION OF MOTOR                 
  VEHICLES, DEPARTMENT OF PUBLIC SAFETY, answered questions on                 
  CSHB 328.                                                                    
                                                                               
  Number 393                                                                   
                                                                               
  REPRESENTATIVE ULMER inquired what the fees would have to be                 
  to keep CSHB 328 revenue neutral.                                            
                                                                               
  Number 395                                                                   
                                                                               
  CHAIRMAN VEZEY responded HB 328 had been discussed                           
  thoroughly at previous meetings she did not attend, and                      
  answered the existing fees would have to be doubled to make                  
  the bill revenue neutral.  He thought the proposed fees in                   
  CSHB 328 are 1.5 times the existing fee, rounded off to the                  
  highest dollar.  To be revenue neutral, the fee would have                   
  to be two times the existing fee.                                            
                                                                               
  Number 402                                                                   
                                                                               
  REPRESENTATIVE ULMER asked why the committee chose not to                    
  make CSHB 328 revenue neutral.                                               
                                                                               
  CHAIRMAN VEZEY replied the committee had referred HB 328 to                  
  a subcommittee and had asked them to report back.                            
                                                                               
  Number 408                                                                   
                                                                               
  REPRESENTATIVE KOTT, HB 328 subcommittee chair, answered the                 
  subcommittee worked with the sponsor and he felt there                       
  should be savings passed on to the consumer.  He emphasized                  
  CSHB 328 did have a Finance referral and he was sure they                    
  would take care of the problem if there was a negative                       
  fiscal effect.  He noted the committee had passed an earlier                 
  motor vehicle registration bill which increased registration                 
  fees.  He felt the Finance Committee would take both bills                   
  into consideration.                                                          
                                                                               
  Number 427                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS asked if the subcommittee had                        
  discussed with the sponsor that it would still be a benefit                  
  to the public to have the opportunity for biennial                           
  registration, even at the same rate.                                         
                                                                               
  Number 434                                                                   
                                                                               
  REPRESENTATIVE KOTT replied it had been discussed, but the                   
  sponsor disagreed and the subcommittee succumbed to the                      
  sponsor.                                                                     
                                                                               
  Number 438                                                                   
                                                                               
  REPRESENTATIVE OLBERG suggested CSHB 328 penalized people                    
  for requiring them to produce $70, instead of $35.                           
                                                                               
  Number 444                                                                   
                                                                               
  MS. HENSLEY stated CSHB 328 would allow individuals to also                  
  use credit cards if the DMV were to obtain the funding to                    
  pay the credit card fees.  The $70 could be paid off over a                  
  period of time.                                                              
                                                                               
  REPRESENTATIVE OLBERG responded it did not cost anything to                  
  use a credit card, but it would be an additional revenue                     
  loss.  He thought the state of Alaska would probably get a                   
  discount rate of one-two percent.                                            
                                                                               
  Number 453                                                                   
                                                                               
  CHAIRMAN VEZEY thought this would account for certainly less                 
  than the time value of the money involved.                                   
                                                                               
  MS. HENSLEY directed comments toward REPRESENTATIVE ULMER'S                  
  previous question regarding the eight percent administrative                 
  fees the state collects.  She responded the fees would be                    
  deposited into the general fund.  The DMV collects                           
  approximately $5.9 million from the municipalities, which                    
  would be would percent.  She noted deleting the                              
  administration tax from DMV would also incur a several                       
  hundred thousand dollar loss to the state.                                   
                                                                               
  Number 462                                                                   
                                                                               
  CHAIRMAN VEZEY believed approximately $400,000 would be lost                 
  as he remembered from previous testimony.                                    
                                                                               
  Number 464                                                                   
                                                                               
  REPRESENTATIVE ULMER asked why the state would want to                       
  delete the administration tax from the DMV.                                  
                                                                               
  Number 465                                                                   
                                                                               
  MS. HENSLEY replied some tax structure would have to be                      
  changed to allow municipalities to go to a biennial tax                      
  collection, as well as the DMV.  The current tax structure                   
  corresponds with an annual registration and collection of                    
  fees.                                                                        
                                                                               
  Number 473                                                                   
                                                                               
  REPRESENTATIVE OLBERG asked if CSHB 328 would be phased in.                  
  He was concerned about the following year, having no one to                  
  register, after the first year biennial registration begins.                 
                                                                               
  Number 477                                                                   
                                                                               
  MS. HENSLEY replied CSHB 328 does allow half the                             
  registrations to be done one year, and half the                              
  registrations to be done the next.                                           
                                                                               
  Number 483                                                                   
                                                                               
  CHAIRMAN VEZEY moved to the Anchorage teleconference site.                   
                                                                               
  Number 485                                                                   
                                                                               
  RON KING, DEPARTMENT OF ENVIRONMENTAL CONSERVATION (DEC),                    
  answered questions on CSHB 328.                                              
                                                                               
  Number 490                                                                   
                                                                               
  REPRESENTATIVE ULMER asked if MR. KING had reviewed the new                  
  CSHB 328 and if he had any problems with it.                                 
                                                                               
  MR. KING responded DEC was preparing a fiscal note with an                   
  explanation of the impact of CSHB 328.  Anchorage and                        
  Fairbanks staff for the vehicle inspection program are very                  
  concerned about the loss of effectiveness by changing to                     
  biennial registration.  Annual inspections and annual                        
  registration provide the strongest enforcement mechanism                     
  available.  Fairbanks feels the biennial program will be                     
  difficult to enforce and the additional work force will have                 
  a limited enforcement mechanism.                                             
                                                                               
  MR. KING stated there were two areas which DEC felt were                     
  crucial for their ability to implement the program.  First,                  
  a fee structure would have to include 4.5 positions, 3.5                     
  within the DEC and 1 within the DMV.  This addition would                    
  cost approximately $450,000.  Secondly, a bailable offense                   
  would have to be added, which would take violators to either                 
  civil or criminal court.  With a bailable offense, DEC would                 
  be able to hold additional employees at 4.5.  Without a                      
  bailable offense, in Anchorage an additional five positions                  
  would have to be added costing approximately $100,000 more.                  
                                                                               
  Number 528                                                                   
                                                                               
  CHAIRMAN VEZEY asked MR. KING to explain his large fiscal                    
  note position.                                                               
                                                                               
  Number 532                                                                   
                                                                               
  MR. KING answered there would be two investigators in the                    
  Fairbanks regional office, combining equipment, utilities,                   
  supplies, and commodities, it would cost approximately                       
  $85,000 per position.  The half time district attorney would                 
  cost approximately $68,000.  The remainder of the fees pay                   
  for stationary mail outs, postage at approximately $50,000.                  
  In Anchorage there would be four principal investigators,                    
  each costing approximately $85,000, with a full-time                         
  district attorney, costing approximately $110,000.  The                      
  commodities and supplies would be contractual.  He noted the                 
  additional court costs.                                                      
                                                                               
  MR. KING noted, with a bailable offense, additional funds                    
  and positions would not be needed within the municipality of                 
  Anchorage.  The Anchorage Parking Authority would take over                  
  representations, in agreement with the municipalities, of                    
  the violators.                                                               
                                                                               
  Number 566                                                                   
                                                                               
  CHAIRMAN VEZEY asked the pleasure of the committee.                          
                                                                               
  Number 569                                                                   
                                                                               
  REPRESENTATIVE ULMER believed CSHB 328 should return to the                  
  subcommittee.                                                                
                                                                               
  Number 571                                                                   
                                                                               
  REPRESENTATIVE OLBERG did not like CSHB 328, but wanted to                   
  pass it on.                                                                  
                                                                               
  Number 572                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS asked if the committee would have to                 
  wait for the additional fiscal notes.                                        
                                                                               
  CHAIRMAN VEZEY replied CSHB 328 could be passed with the                     
  current fiscal notes; however, there are new fiscal notes                    
  coming to the committee.                                                     
                                                                               
  Number 579                                                                   
                                                                               
  REPRESENTATIVE KOTT moved to amend CSHB 328 on page 6, line                  
  22, and page 10, line 24, to change "annual" to read                         
  "biennial."                                                                  
                                                                               
  CHAIRMAN VEZEY recognized the motion and hearing no                          
  objection, REPRESENTATIVE KOTT'S amendment was adopted.                      
                                                                               
  Number 591                                                                   
                                                                               
  REPRESENTATIVE OLBERG felt the fees should be amended, but                   
  they would probably be taken care of in the Finance                          
  Committee.                                                                   
                                                                               
  Number 597                                                                   
                                                                               
  REPRESENTATIVE KOTT moved CSHB 328 be passed from committee                  
  with individual recommendations.  He felt Finance should                     
  deal with the technical aspects such as funding.  He noted                   
  the money for the extra positions, as mentioned by the DEC,                  
  would not come from the general fund.  The positions would                   
  be covered by the program receipts.                                          
                                                                               
  Number 605                                                                   
                                                                               
  REPRESENTATIVE ULMER objected to REPRESENTATIVE KOTT's                       
  motion.  She felt passing CSHB 328 would not be responsible                  
  action by the committee as it costs almost $5 million and                    
  does not achieve very much.  The small amount of less work                   
  is not worth the money that will have to be spent on CSHB
  328.                                                                         
                                                                               
  REPRESENTATIVE G. DAVIS also objected to the motion.  He                     
  asked if there was the possibility of an optional biennial                   
  program, for those who may have the fees to pay biennially                   
  and others may pay annually.  He would not vote to pass CSHB
  328 from committee.                                                          
                                                                               
  REPRESENTATIVE OLBERG objected to the fee structure, and he                  
  would not want CSHB 328 to pass if it were to allow DEC to                   
  have that many positions.                                                    
                                                                               
  Number 625                                                                   
                                                                               
  MS. HENSLEY responded DMV has considered a biennial                          
  registration, and regardless of the passage of CSHB 328,                     
  they would consider it in locations where they did not have                  
  to collect the emissions testing certificate and the                         
  municipal taxes.  DMV collects taxes for approximately 10                    
  municipalities and they do already have biennial                             
  registration as an option.                                                   
                                                                               
  CHAIRMAN VEZEY asked the committee secretary to call the                     
  roll, and with 3 YEAS and 2 NAYS, CSHB 328 failed to pass                    
  from the House State Affairs Committee.                                      
  HB 407 - COMMEMORATIVE GOLD RUSH LICENSE PLATES                              
                                                                               
  CHAIRMAN VEZEY opened HB 407 for discussion under bills                      
  previously heard.  He stated a proposed committee                            
  substitute, version J, for HB 407 was before the committee.                  
  CHAIRMAN VEZEY asked if there was a motion before the                        
  committee to adopt version J of committee substitute for HB
  407.                                                                         
                                                                               
  Number 651                                                                   
                                                                               
  REPRESENTATIVE G. DAVIS so moved.                                            
                                                                               
  Number 652                                                                   
                                                                               
  Hearing no objection, CHAIRMAN VEZEY announced CSHB 407,                     
  version J, was adopted.                                                      
                                                                               
  MS. HENSLEY, DIVISION OF MOTOR VEHICLES, DEPARTMENT OF                       
  PUBLIC SAFETY, addressed CSHB 407.  She stated                               
  REPRESENTATIVE RICHARD FOSTER, introduced the first                          
  committee substitute, version E, which basically allowed the                 
  commemorative Gold Rush license plate to be displayed for a                  
  four year period.  After the four year period, the Alaska                    
  flag plates would resume.                                                    
                                                                               
  MS. HENSLEY stated CSHB 407, version J, deletes the four                     
  year provision and the commemorative Gold Rush license plate                 
  would become Alaska's standard issue license plate,                          
  effective January 1, 1996.  DMV is neutral on this version.                  
  There would be 25 percent of the public requesting the new                   
  plate and everyone would not be required to obtain a new                     
  plate.                                                                       
                                                                               
  MS. HENSLEY noted the total operating cost to the state                      
  would be $45,000 for the first year, because it would only                   
  be for half of that year, $90,000 the next year, and $45,000                 
  for every year thereafter.  Revenued generated from CSHB 407                 
  would be $67,000 the first year, $135,000 the second year,                   
  and $67,000 every year thereafter.  CSHB 407 would generate                  
  revenue with program receipts.                                               
                                                                               
  Number 688                                                                   
                                                                               
  CHAIRMAN VEZEY questioned if CSHB 407 could be phased in so                  
  existing stock of Alaska flag plates could be used before                    
  the new plates were issued.                                                  
                                                                               
  Number 691                                                                   
                                                                               
  MS. HENSLEY said yes, the DMV would use the current supply                   
  and be able to order specific amounts through capital funds.                 
                                                                               
  TAPE 94-23, SIDE A                                                           
  Number 000                                                                   
                                                                               
  (REPRESENTATIVE OLBERG left the meeting at 9:50 a.m.)                        
                                                                               
  REPRESENTATIVE ULMER inquired about the design and choice                    
  process the DMV goes through to pick a new license plate.                    
                                                                               
  Number 014                                                                   
                                                                               
  MS. HENSLEY replied the process flows through a developed                    
  committee comprised of interested individuals who review                     
  designs which are submitted by the public.  For example, a                   
  car club designed a special car plate and the committee had                  
  final say over the appropriateness of the design.  In terms                  
  of the Alaska flag plate, the committee was very involved in                 
  the actual design.                                                           
                                                                               
  REPRESENTATIVE ULMER asked if there was a cost associated                    
  with the design process.                                                     
                                                                               
  MS. HENSLEY answered there has not been a cost in the past.                  
  Artists usually submit their work and then they work with 3M                 
  Company on the paint and coverings required.                                 
                                                                               
  CHAIRMAN VEZEY commented selecting a design using the Alaska                 
  flag involved a series of artistic decisions.                                
                                                                               
  REPRESENTATIVE ULMER had trouble visualizing a Gold Rush                     
  license plate.                                                               
                                                                               
  MS. HENSLEY stated the committee on the Gold Rush                            
  Commemorative plate has already submitted a sample design of                 
  a drawing they would like.  The state of Alaska is outlined                  
  and then it has a miner with a pick and a gold pan in the                    
  middle.  She commented that a sample could be made available                 
  for committees to see within a couple of weeks.                              
                                                                               
  (REPRESENTATIVE OLBERG returned at 9:52 a.m.)                                
                                                                               
  Number 076                                                                   
                                                                               
  CHAIRMAN VEZEY stated CSHB 407 would be held in committee                    
  pending transmittal of a fiscal note.  He asked if the                       
  committee would be interested in an amendment which would                    
  allow the plates to be phased in as existing stock is used                   
  up.  He thought it may produce a very minor cost savings.                    
                                                                               
  REPRESENTATIVE G. DAVIS believed CSHB 407 would end up                       
  phasing in the plates, anyway.                                               
                                                                               
  Number 096                                                                   
                                                                               
  MS. HENSLEY stated she would provide the fiscal note to the                  
  Governor's Office on Monday morning.                                         
                                                                               
  Number 102                                                                   
                                                                               
  Hearing no more business before the committee, CHAIRMAN                      
  VEZEY adjourned the meeting at 9:53 a.m.                                     
                                                                               
  ANNOUNCEMENTS                                                                
                                                                               
  Alaska Railroad Subcommittee will meet at 10:30 a.m., March                  
  5, 1994, to review the final draft of the Alaska Railroad                    
  Report.                                                                      
  OTHER BILLS NOT HEARD                                                        
                                                                               
  HB 375 - PERMANENT FUND INVESTMENTS - LTD PARTNERS                           

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